Yes, thought I have written a story in long hand before. I find sometimes It is nice to get a break from staring at a computer screen and grab a pen and paper.
Not really, though I should print regularly, because I get awfully worried my computer will break and I'll lose my progress.
Yes, I find it easier to read a story on paper and go through it with a high lighter, then editing on a computer. I'm very old fashioned on that sense, but reading it on paper is often a good way to pick out mistakes or notice things you'd like to add in.
My process varies from story to story, but goes something like this... A dream, write down important parts so I don't forget, start with a prologue, edit each chapter when it's finished, finish story and DON'T get distracted or start another... No matter how many idea's come to mind. Just jot them down, and finish the task at hand. Once the book is finished, print it out, edit, sometimes re-writing can be useful (yes, I know re-writing a 400 page story can be annoying, but you'd be surprised how much better things can turn out the second time round). Keep doing that until you are happy with your draft, allow people you trust to read it, get feed back, edit more. Then rinse and repeat.